More on the Uber ultimatum

Ride-hailing giant Uber threatened Wednesday to stop operating in Houston unless city leaders amend local regulations the company said are making it tough for them to recruit drivers.

The ultimatum, the latest skirmish in what has been a contentious relationship between Uber and the city since it started operating here two years ago, drew a strong rebuke from city leaders.

“This is just not how we do business in Houston,” said Mayor Sylvester Turner, who added the city “will not compromise on public safety.”

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The Uber announcement, which officials viewed as a threat to meet the company’s demands or lose the service, was met with frustration by city leaders, some of whom have grown increasingly exasperated by the tumult.

“If you don’t want to follow the rules we all agreed to, have a good opportunity in another city,” District E Councilman David Martin said. “But we cannot be blackmailed when it comes to public safety.”

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Uber and its supporters argue that part-time driving for the company helps people make money while keeping rates for riders cheap.

The company in its report said drivers take an average of four months to sign up with Uber and complete the city permitting process. Houston officials said the longest a driver has waited is two months, and that the average time to clear the regulations is 11 days. About 47 percent of drivers received a license within a week, officials said.

“What they are putting out is factually incorrect,” Turner said, adding that he thought the company’s motive is to put pressure on politicians to capitulate.

See here for the background. I didn’t expect Uber’s announcement to be greeted warmly, but I am a bit surprised that no one stepped forward to defend them, or at least to criticize the fingerprint policy, in the story. CM Martin’s comment is of particular interest, since Uber’s main allies on Prop 1 in Austin are a couple of conservative Republican Council members there. I’ve look around at other coverage but have not seen any other reactions from Council members. I will be very interested to see who, if anyone, is in Uber’s corner on this. It was one thing to advocate for allowing Uber to operate here. This is a whole ‘nother level, and unless a Council member comes under pressure from constituents, it’s rather a large stretch.

Notwithstanding the curious timing (voters in Austin will decide May 7 whether to keep similar regulations; early voting for the ballot measure started this week), it’s hard to know what to make of Uber’s claims. Officials with the City of Houston insist that, by pretty much any trackable measure, Uber has been a resounding success here. The city’s Administration and Regulatory Affairs department says that every month it sees an increase in drivers who want a license to drive for the company. And, according to city officials, judging by the company’s revenue in Houston (under the regulations passed in 2014, Uber pays 2 percent of gross bookings to the city), Uber is doing quite well.

It seems there’s either fundamental difference of interpretation or someone’s not telling the whole truth. We’d love to get to the bottom of this, but here’s the problem: Uber has sued to block the city from releasing pretty much any internal data that could show whether Houston’s regulations have been a success or unreasonable burden for rideshares.

Lara Cottingham, deputy assistant director of the city’s Administration and Regulatory Affairs department, insists that Uber has had an undeniably good run here since the city began enforcing its rules for licensing drivers for so-called transportation network companies (or TNCs) like Uber, limo services and taxi companies. “The number of drivers is increasing, their revenue is increasing, everything seems to be working out for them very, very well,” Cottingham told us. “But because Uber sued us to stop us from releasing [those numbers], I can’t tell you how successful they are.”

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While Uber claims it takes drivers on average four months to get a city license, Cottingham says that’s just not the case. She says that according to a survey the city conducted this spring (which, of course, she can’t release because of Uber’s lawsuit), nearly half of all drivers got their license within a week of applying – almost all (about 84 percent) had al license within three weeks of applying, she claims. Whatever the case, Uber’s Meridia said in the letter to city leaders yesterday that demand in Houston “continues to grow approximately twice as fast as our ability to onboard qualified drivers.”

Cottingham says the city has streamlined the process as much as possible, but what Uber’s really asking for – axing the city’s additional background check provision – isn’t an option.

KTRK also noted that some of the facts in dispute cannot be checked on either end. That makes this more of a PR battle than anything else. Do people, who clearly like using Uber’s service, side with them against the city and buy into the argument that needless regulation is making it impossible to operate? Or do they see the fingerprint requirement as a basic safety measure, which Uber should have no issue with complying? That seems to me to be the basic outline of the dispute, and it’s why I’m so interested in who Uber’s proxies will be in the fight. I’m sure Mayor Turner’s response to this has been along the lines of “I don’t need this $#!+ right now”. Who will be on his side? BOR has more.

13 Comments

It’s not at all fair to characterize uber and lyft’s Austin supporters as conservative Republicans. It’s much more generational – old Democrats, including the ones who control the apparatus of the city’s incredibly powerful Democratic Party Machine, are tied up with cab companies. But young Democrats, and those merely young-at-heart (yours truly), are more likely to support the TNC case and oppose the taxicab companies who engaged in regulatory capture.

Mike, I’m noting that our CM Dave Martin is ideologically similar to your Council’s Don Zimmerman. We have a few Council members who I would expect to be sympathetic to an argument about regulatory overreach, and he’s one of them. The fact that he reacted to Uber’s threat in this fashion is telling to me, and suggests they won’t have as many allies as one might expect.

I’m not making any claims about Uber’s service in cities that do or do not use fingerprint background checks. I’m saying I don’t buy Uber’s claims about the efficacy of their own background checks, and that I am skeptical about their claims about how long the process takes. I don’t think fingerprint background checks are the be-all and end-all, but I do think we need something more than what Uber does, and I don’t trust Uber to be the sole arbiter of who should be driving for them. And I really don’t like their methods of achieving their stated goals.

I say all this as someone who supported Uber’s entry into Houston in the first place. I have no particular love for cab companies, though to some extent the reasons we don’t like cab companies are the fault of our city councils and not the companies themselves. I believe Uber and Lyft and Get Me provide a useful service, I totally agree that they have contributed to a decrease in drunk driving, and all in all I’d rather have them than not. But that doesn’t mean I want them to write their own regulations any more than I want cab companies to write their own regulations, and I don’t like bullies.

The existing regulations are de-facto ones written by the cab companies. Or at least, they have a vested interest in them not being changed.

As for lyft, again, if uber’s claims about how long it takes to do checks are not true, then why did lyft leave? They haven’t been shown to be dishonest in any way like uber obviously have, yet for them fingerprinting was also a non-starter. Why?

Lyft left town before the current ordinance took effect, so they have no claims to make about how long it takes the city to do its fingerprint checks. They said at the time that their background checks were good enough and they didn’t want to be subject to the city’s requirements. So, it’s Uber’s word against the city’s.

The only issue that makes my mind busy at this time is what has been totally forgotten in any discussion. What happened to thousands of drivers who did everything they could to serve their fellow citizens with honesty and integrity under a critical time period? I’m not even talking about those who used to drive a bit to make extra money for themselves and their families! I’m taking for a majority of good people in Houston who started making a life out of this new born industry presented by Uber and then Lyft. Majority of 25000 registered drivers in Houston who worked harder and longer than anyone from outside could ever imagine and deal with all unexpected and consistent rate deductions from both platforms and regulations that they shouldn’t expect to get even a bit of support from rideshare providers by working even harder and harder.
What did happen to their life and their families and beloveds?
Is there anyone of those who act or even think to support the anti rideshare opposition which finally made Uber and Lyft to ignoring operating in this market ever think about?!!

Why Austin will Vote away government need for fingerprints @over 71%,uber will be allowed to conduct their own background. What people are oblivious to,is the major differential the citizens received once uber hit town -in the transportation fares “magically they dropped by 60% overnight” people know the difference between ,hey ,I got a Lil discount and “damn I was getting ripped out” and truuuust me ,over 70% of the Austin voters feel like they were getting ripped off,prior to uber and quess what “newsflash” they were and man are they going to show their frustration when they vote, actually its the exact same model that Mayor Turner is oblivious to as well,people are sick emotionally to find out that they have been getting ripped off-listen to me,record it ,write it down,do whatever you want to do with it Austin will Vote with uber and Mayor Turner doesn’t have a clue how to handle the will of the people.

[…] and it’s why I called the forthcoming fight over Uber and Houston’s current ordinance a public relations fight. The side that gets to define the question to be answered is the side that will win. BOR has […]